Gas Prices Up 63 Cents Since Beginning of Year

By RICK MELLERUP | May 01, 2019

Surf City —

So far in 2019 American motorists have been like the metaphorical frog that is being gradually boiled alive.

Prices at the pump have been slowly but steadily rising and, so far at least, drivers haven’t jumped out of the pot, continuing to fill up often despite the national average for a gallon or regular unleaded rising 63 cents since the start of the year.

“Compared to the beginning of the year, motorists have definitely felt an increasing squeeze on their wallets at the pump,” said Jeanette Casselano, a spokeswoman for AAA. “These increases mean Americans are having to work more to afford to fill up their gas tanks. AAA found that Americans must work 22 percent longer than at the start of the year to buy one gallon of unleaded gasoline – that’s 7.3 minutes compared to 5.76 minutes in January.”

AAA issues a gasoline price press release every Monday unless a Monday is a holiday. Over the next three months, prices rose from an average of $2.25 on Jan. 3 to $2.88 on April 29.

Casselano blamed price increases in February on “a number of refineries undergoing planned and unplanned maintenance, and an increase in crude oil prices” as well as reduced gasoline stock levels and continued increasing demand.

March was no better. “Three months ago,” Casselano reported on April 1, “motorists could find gas for less than $2.50 at 78 percent of gas stations. Today, you can only find gas for that price at one-third of the stations, which is likely giving sticker shock to motorists across the country. Gasoline stocks have been steadily decreasing since early February causing spikes at the pump that are likely to continued for the coming weeks.”

The biggest news on the oil/gasoline front in April, though, occurred on April 22 when the Trump administration announced it will no longer grant waivers to any country that is currently importing oil from Iran. Eight countries – China, India, Japan, South Korea, Turkey, Italy, Greece and Taiwan – had been importing about one million barrels per day from Iran. If they are forced to buy their oil elsewhere, supply will be squeezed, especially since Saudi Arabia has led a movement to reduce production by OPEC nations and Russia for several months, eventually keeping 1.2 million barrels per day off the market.

On April 22 President Trump didn’t appear concerned about the prospect of rising oil prices due to his administration’s decision to push Iran out of the world market. “Saudi Arabia and others in OPEC will more than make up the Oil Flow difference in our now Full Sanctions on Iranian Oil,” he tweeted.

That same day Saudi Energy Minister Khalid al-Falih said Saudi Arabia will “coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance.”

On Monday, however, Reuters reported that Khalid al-Falih said a deal between oil exporters to suppress production could be extended beyond June – when OPEC will meet – to cover all of 2019. Toss in the continuing deteriorating conditions in Venezuala and Libya and geopolitical factors could force the price of oil, which has risen some 40 percent since the beginning of the year, even higher.

Yet American motorists seem unaware, like the frog in the pot, that they could be in trouble. On March 28 AAA released a survey that showed 33 percent of Americans said they would likely plan another summer road trip and 27 percent said they would increase the distance of one “if gas prices remain low.” At that time AAA expected the national gas price average to reach $2.75 a gallon, compared to the $2.92 high of the spring of 2018. At $2.88 a gallon now, prices are expected to continue to rise through at least Memorial Day.

Perhaps Americans will start to feel the heat at the gas pumps soon.

Rick Mellerup

rickmellerup@thesandpaper.net

 

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